FTSE All-Share Index (.FTAS) Market Round-Up

Last week, the benchmark FTSE All-Share Index (.FTAS) started on a negative note and made a low of 3892.39 on May 13, 2021. However, till the end of the week, some of its earlier losses were erased and the index settled at 4012.07 with a loss of ~1.33 percent for the week ending May 14, 2021. The recent week also started on a marginal negative tone; however, prices are still sustaining above the resistance turned support level 4000, indicating the possibility of an upward direction for the index. On the weekly chart, index prices are trading in a rising wedge formation and currently facing stiff resistance from the upper band of the pattern i.e., an upward sloping trend line. The leading indicator RSI (14-period) is trading at ~63.33 levels and seems supportive for a positive movement. Prices are well placed above trend-following indicators 21-period and 50-period SMA, further providing strength to the index.

Global equities witnessed a sell-off last week due to higher US inflation data. As per the data released by the U.S. Bureau of Labor Statistics, the Consumer Price Index increased 4.2 percent before seasonal adjustment over the last 12 months, the largest 12-month increase since the period ending September 2008. The UK’s first quarter (January to March 2021) GDP estimate released by the Office for National Statistics further acted as the catalyst for downside movement. As per data, the UK GDP is estimated to have declined by 1.5% in Q1 of 2021.

Global Markets Wrap-Up

Last week, Wall Street witnessed a bearish movement due to inflation fear and the two benchmark indices  ended in  red. S&P 500 settled at 4173.85 with a loss of ~1.39 percent while NASDAQ Composite Index settled at 13,429.98 with a loss of ~2.34 percent for the week ending May 14, 2021. As per the data released by the US Bureau of Labor Statistics, the US weekly unemployment claims declined last week to 473,000 from 507,000 in the prior week and restricted further downside movement in the indices.

Having understood the US market performance over the past one week, taking cues from major global news, and based on our technical analysis of the FTSE All-Share Index (.FTAS) for the upcoming week, now let us have a look at the two FTSE listed stock picks from the technical standpoint. Noted below are our recommendations based on generic insights, entry price, target prices, and stop-loss for Greencore Group PLC (LON: GNC) and Georgia Capital PLC (LON: CGEO) for the next 2-4 weeks duration:

Greencore Group PLC 

Greencore Group Plc (LON: GNC) is an Irish-based food company. The company is a convenience food manufacturer and a major supplier of salad, sushi, sandwiches, chilled ready meals, pickles, etc. to Great Britain and Irish supermarkets. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

GNC's prices broke a major resistance level of GBX 164 on May 11, 2021 after more than two months of consolidation and trading above the breakout level. The breakout is backed by higher volumes, indicating the possibility of an upward direction for the stock. Now the next major resistance level appears at GBX 196 and prices may test the level in the short-term (2-4 weeks). A breakout above the GBX 196 accompanied by the volume may extend buying in the stock till the next resistance level GBX 222. 

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~69.54 levels and indicating a positive trend for the stock. The weekly volumes also seem supportive of an upside movement. The CMP is above the 21-period and 50-period SMA with a positive crossover, further providing support for an upward direction.

Financial Summary:

Summary of the Key Financial Metrics for the past four years for Greencore Group PLC is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Greencore Group PLC is looking technically well-placed on the chart and considering the stock prices are trading near to its 52-week high, we have a ‘Speculative Buy’ rating on the stock. Investment decision should be made depending on an investors’ appetite on upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of our recommendation is as follows:

Georgia Capital PLC

Georgia Capital PLC (LON: CGEO) is a UK-based holding company engaged in water utilities and renewable energy generation business. The company’s focus is to invest in developing businesses in Georgia. Noted below are the key price indicators for the stock: 

Price Action Analysis (on the Weekly Chart)

CGEO's prices broke a major resistance level of GBX 605 on May 11, 2021 and since then trading above the breakout level. The breakout is supported by the sharp rise in the volume, thereby higher market participation supporting an upside movement. Prices are also sustaining above an upward sloping trend line and indicating a positive trend for the stock. Now the next major resistance level appears at GBX 735 and prices may test the level in the short-term (2-4 weeks). A breakout above the GBX 735 backed by the volume may extend buying in the stock till GBX 789 level.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~67.64 levels and indicating a positive trend for the stock. The weekly volumes seem supportive of an upside movement. The CMP is above the 21-period and 50-period SMA with a positive crossover, further providing support for an upward direction.

Financial Summary:

Summary of the Key Financial Metrics for the past four years for Georgia Capital PLC is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Georgia Capital PLC is looking technically well-placed on the chart and considering the stock prices are trading near to its 52-week high, we have a ‘Speculative Buy’ rating on the stock. Investment decision should be made depending on an investors’ appetite for upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of our recommendation is as follows:

Upcoming Major Global Economic Events

Market events occur on a day-to-day basis depending on the frequency of the data and generally include an update on employment, inflation, GDP, consumer sentiments, etc. Noted below are the upcoming week's major global economic events that could impact the FTSE All-Share Index and listed stocks’ prices.

Investment Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.60:1.00), however, returns are generated within 2-4 weeks’ time frame. This may be looked at by Investors with sufficient risk appetite looking for returns within short investment duration. Investment recommendations provided in this report are solely based on technical parameters, and fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, and social and political instability risks etc.

Entry Price: For the given recommendation(s), Entry Price is assumed be at or above a certain level. However, a slight deviation on either side in the ‘Entry Price’ can be considered depending upon the potential expected or indicated.

Note: How to Read the Charts?

The Green colour line reflects the 21-period moving average while the red line indicates the 50- period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

A trailing stop-loss is a modification of stop-loss in case of favourable movement in the price to protect the gains. We suggest Investors to Trail the Stop-Loss as per the aforementioned levels if the stock price achieves more than 50% of the Target 1. Investors should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 50% of the Target 1.

Risk Reward Ratio: Risk reward ratio is the difference between an entry point to a stop loss and profit level. We suggest ~60% Stop Loss of the Target 1 from the entry point.

The reference date for all price data, volumes, technical indicators, support, and resistance levels is May 17, 2021.

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

GBP: British pound sterling

GBX: British pence sterling

RSI: Relative Strength Index

USD: United States dollar

Note: Trading decisions require a thorough analysis by investors. Technical reports in general chart out metrics that may be assessed by investors before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

---

Disclaimer

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.

Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.